Governor Claims Growth While Jobs Disappear
By Karl Peterjohn, Executive Director Kansas Taxpayers Network
Governor Sebelius’ press office issued a news release headlined, “Kansas economy continues to grow under Governor’s leadership,” August 4. The same day the Wichita Eagle headlined the layoffs in Winfield as 1/3 of the 600 employees at Rubbermaid Inc. were laid off.
Is the Kansas economy growing or are the layoffs plaguing the private sector in Kansas aberrations? Recently, the Kansas branch of Americans for Prosperity has been reporting that for every new state and local government jobs that have been created in Kansas in the last five years, a larger number of private sector jobs have disappeared.
This is a distressing trend when Kansas state and local government employment is measured. Kansas is already one of the top states for government employment as a percentage of the workforce when census figures compare the Sunflower state to our neighbors.
Despite the shrinking private sector in Kansas, it is certainly true that state revenues are growing. If there had been any limits on fiscal spending, there would have been plenty of money to start making the Kansas tax climate competitive. Instead, the money was spent by profligate “moderates” from both major political parties that dominate the statehouse. Governor Sebelius, a very liberal “moderate,” happily signed this increased spending into law.
State revenues for the fiscal year that ended June 30 were 7.1 percent, or $322.5 million, above the previous year’s total. This is good news and the governor deserves the credit, right? Well, you need to look at the rest of the country. The Wall Street Journal reported July 12 that federal tax revenues were 14.6%, or $204 billion, above the same level as last year.
So, Kansas is actually growing its tax base at less than half the national rate. Governor Sebelius claimed, “Kansas businesses are hiring more employees, Kansas workers are earning more, and Kansas consumers are spending more.” The governor went on to cite additional public school “investment,” the most popular euphemism for increased government spending, as a reason for this growth.
The actual reason for the growing revenues is the 2003 federal tax cuts passed by Congress and President Bush and the economic stimulus that federal tax cuts are generating. The positive economic impact of this tax cut is covering the entire country. Even Kansas is getting some benefit from the federal tax cut that was opposed by almost every Democrat in Congress. Ironically, these cuts may improve the Kansas economy enough to help Governor Sebelius win a second term in office next year.
What is clear about this data is that Kansas is lagging behind the rest of the country. Many Kansans, including our governor, do not even realize this fact. This situation is going to get worse even before the activist Kansas Supreme Court can expand their fiscal damage with more edicts in 2006.
Oklahoma recently enacted personal income tax cuts that will lower that state’s top income tax rate to below Kansas’ top rate beginning in 2006. Instead of spending their fiscal windfall like Kansas, Oklahoma is investing it in their people in the form of a six percent personal income tax cut. In Kansas, the only growth industry is bigger government and rising prospects for future tax hikes.